The author of this article, Steven J. Koprince, is also the author of the book entitled “The Small-Business Guide to Government Contracts.”

In a technical correction published Oct. 19th in the Federal Register, the SBA flatly states that an earlier major rulemaking eliminated populated joint venture, and tweaks the profit-sharing piece of its 8(a) joint venture regulation to remove an outdated reference to populated joint ventures. But even following this technical correction, there are three important points of potential confusion that remain (at least in my mind) regarding the SBA’s new joint venture regulations.

If you’re a SmallGovCon reader, you know that the Small Business Administration (SBA) made some major adjustments to its rules regarding joint ventures earlier this year. Among those changes, the SBA amended the definition of a joint venture to state that, among other things, a joint venture “may be in the form of a formal or informal partnership or exist as a separate legal entity.” If the joint venture is a separate legal entity, it “may not be populated with individuals intended to perform contracts,” although the joint venture may still be populated with one or more administrative personnel.

In conducting a cost realism evaluation, an agency was entitled to use an offeror’s historic approved indirect rates and current incumbent direct labor rates to upwardly adjust the offeror’s evaluated cost, in a case where the offeror’s proposed rates were significantly lower.

The Government Accountability Office (GAO) recently held that an agency did not err by adjusting a protester’s rates to better align with the protester’s historic indirect rates and current direct rates, where the agency was unable to determine that the protester’s significantly lower proposed rates were realistic.

In AM Pierce & Associates Inc., B-413128 et al. (Aug. 22, 2016), GAO considered a protest by a disappointed offeror challenging the Navy’s evaluation under a solicitation seeking program management support services for the H-60 Helicopter Program Office. The solicitation was completely set-aside for EDWOSBs. The resulting contract was to be awarded on a cost-plus-fixed-fee basis, under a best-value evaluation.

The solicitation said that offerors’ proposed costs would be evaluated for realism, to determine whether the overall costs were realistic for the work to be performed, reflective of the offeror’s understanding of the requirements, and/or consistent with the technical proposal. To facilitate the evaluation, the RFP required offerors to substantiate their proposed direct and indirect labor rates through payroll verification, contingent offer letters, Defense Contract Audit Agency (DCAA) rate verification or approval letters, or other detailed justification methods. The cost realism analysis would then involve a calculation of each offeror’s evaluated costs, to reflect the estimated most probable costs. This determination would include an evaluation of the offeror’s cost information — including its substantiated labor rates.

In the recent bid protest decision of Halbert Construction Company Inc., the Government Accountability Office (GAO) illustrated the breadth of a procuring agency’s discretion in conducting a past performance evaluation.

Halbert Construction brought the protest after being excluded from the competitive range, arguing primarily that the Navy unreasonably included a non-relevant prior project in the past performance evaluation which led to Halbert Construction’s exclusion. The GAO sustained the protest based on the well- established principle that offerors must be treated equally because the Navy excluded another offeror’s past performance reference from the evaluation as not relevant under the solicitation’s relevancy criteria but then failed to do the same for the protestor.

More notable than the relatively straight-forward application of the disparate treatment principle was the decision’s discussion of the very broad discretion of agencies in past performance evaluations.

People are fallible, and misunderstandings are a part of life. Construction work is no exception.

However, when it comes to construction contracts, time and money are at stake. A lack of legal background is, of course, one of the primary drivers behind misinterpretations, but there’s also the fact that many contractors think they’ve seen and know everything based on experience.

“Most construction contractors follow custom and standard practice in the industry, or what they’ve always done in the past,” said Chicago attorney Matthew Horn, a long-time construction law attorney and founder of Legal Services Link. “But when something goes wrong … that’s when you get into litigation.” Horn said that it doesn’t even have to be a “newbie” in the construction business who gets it wrong. “It’s not unusual for (experienced) parties to a construction contract not to fully understand what it says,” he said.

Attorney Ken Perry, with Perry & Aronin in New York, said the degree to which contractors should worry about misinterpreting the terms in a contract often varies depending on how well they know the other party. He said it’s always smart to scrutinize a contract no matter the source, but he added that the odds of a positive outcome in the event of a misunderstanding are always higher when doing business with a trusted partner. “Relationships are the most important consideration,” he said. “Know who you’re dealing with.”

Attorney Daryl Williams, with Baird Williams & Greer in Phoenix, said, “There are some people who can work with others on a handshake, and that is the best type of relationship, but a contract with a new party … who will not consent to simple things — or demands extraordinary things — means you are in trouble.” Williams said contractors, as well as other parties, enter into contracts for the protection they provide, so contractors need to pay close attention to any “form contract” from the other party. “You can count on the fact that the form produced by the other side is slanted it its favor,” he said.

Every government contractor that files a bid protest has the same goal in mind – corrective action. The agency made a procurement error and changes need to be made.

But just because the agency takes corrective action does not mean it will be the corrective action your firm wants. Contractors should take the time to consider the possible outcomes of a successful bid protest before filing.

Take, for example, the recent U.S. Court of Federal Appeals decision denying a protest over corrective action. In that case, an unsuccessful offeror successfully protested a United States Transportation Command non-temporary storage contract. In response to the protest, the agency took corrective action and started the process of re-evaluating all offerors in order to make a new award decision.

But this was not the corrective action the protestor expected. Because the protest argued that the original awardee’s proposal was technically deficient, the protestor wanted the government to cancel the first award and make a new award decision (in its favor) without further evaluation.

The Court rejected the idea that a protester can limit the agency’s authority to correct evaluation errors. To the contrary, the decision holds that it is within the agency’s discretion to review its prior conclusions and conduct a re-evaluation (provided that the new evaluation conforms to the solicitation and is fair to all offerors).

So is the takeaway that your firm shouldn’t file a protest unless it knows it will receive the award?

The much-anticipated so-called federal contractor “blacklisting” rules and guidance (“Final Rule” and “Guidance”) were published in the federal register on August 25, 2016. The Final Rule becomes effective on October 25, 2016 and imposes four new legal obligations on covered federal contractors, which will be phased in over the next year (starting as early as October 25, 2016).

It is important to also note that this is being phased in via Federal Acquisition Regulation (“FAR”) solicitation and contract provisions. This means that the Final Rule “becomes effective” by beginning to appear in new solicitations issued on or after October 25, 2016. This should not dampen a company’s concern and speed of progressing through the steps below and determining and pursuing compliance, but it is critical to understand and follow the specific path of obligation.

First, federal contractors will have to disclose “labor law decisions” both before and after contract award. The federal government will use these disclosures in making their “responsibility” determinations – the determination of whether the contractor is a responsible source to whom a contract may be awarded.

Second, contractors must give a wage statement to employees containing for each workweek the number of hours worked, the number of overtime hours, rate of pay, and additions to and from gross pay, and total gross pay.

Third, contractors must provide written notice to independent contractors informing them that they are independent contractors and not employees.

Fourth, contractors can no longer enter into agreements with employees or independent contractors that require arbitration of claims under Title VII of the Civil Rights Act (includes discrimination and retaliation claims based on race, color, religion, sex and national origin) or sexual harassment claims.

Federal contractors will need to become quick studies of the Final Rule and Guidance in order to begin developing procedures to ensure compliance as these requirements phase in over the next year.

An offeror’s failure to provide the type of past performance information mandated by a solicitation led to the offeror’s elimination from consideration for a major GSA contract.

A recent GAO bid protest decision highlights the importance of fully reading and adhering to a solicitation’s requirements–including those involving the type of past performance or experience information required.

GAO’s decision in Dougherty & Associates, Inc., B-413155.9 (Sept. 1, 2016) involved the GSA “HCaTS” solicitation, which contemplated the award of multiple IDIQ contracts to provide Human Capital and Training Solutions across the federal government. The solicitation was divided into two Pools based on the offeror’s small business size status. The GSA established a target of 40 awards for each Pool.

The solicitation provided for award based on best-value, and included a requirement for past experience, which stated:

An agency just messed up a procurement, and you want to protest. Where do you go?

The vast majority of bid protests are filed with the Government Accountability Office (GAO). A far smaller percentage of protests are brought as lawsuits before the Court of Federal Claims (CFC). It is easy to forget there is a third forum available for most protests of federal procurements — the procuring agency itself, which may be preferable to the GAO and the court in certain circumstances.

Agency-level protests are governed by Federal Acquisition Regulation Part 33 and agency FAR supplements. In a nutshell, they are written complaints addressed to the contracting officer or another designated official requesting corrective action of some sort. FAR 33.103(d)(4) allows protesters to request review of the protest at a level above the contracting officer, which the agency may allow either as an alternative to review by the contracting officer, or as an appeal from his or her decision.

As at the GAO, a protest to the agency ordinarily is timely if filed before bid opening or the date set for receipt of proposals (for solicitation improprieties) or no later than 10 days after the protest ground was known or should have been known (for all other grounds) (FAR 33.103(e)). The GAO’s debriefing exception — allowing protests to be filed later than 10 days after a ground is known if filed within 10 days after a required and requested debriefing — does not apply to agency-level protests. (See M2 Global Tech., Ltd., B-400946, Jan. 8, 2009, 2009 CPD ¶ 13 at 3.)

And, as at the GAO, timely receipt of a pre-award protest ordinarily stays the contract award, and timely receipt of a protest within 10 days after a contract award or five days after a required and requested debriefing ordinarily stays performance of an awarded contract (FAR 33.103(f)(1) and 33.103(f)(3)).

Beyond these very basic rules, agencies are generally free to proceed as they see fit in accordance with internal agency policy.

Before deciding whether to set-aside a solicitation for small businesses under FAR 19.502-2, should the contracting officer first determine whether those small business will be able to provide the needed services while, at the same time, complying with the limitation on subcontracting?

No, according to a recent Government Accountability Office (GAO) bid protest decision. Instead, an agency’s determination whether a small business will comply with the limitation on subcontracting should be made as part of its award decision (following the evaluation of proposals), not during its initial set-aside determination.

Under FAR 19.502-2(b), a procurement with an anticipated dollar amount greater than $150,000 must be set-aside for small businesses where there is a reasonable expectation that offers will be received from at least two responsible small businesses and that award will be made at fair market prices. Though orders under Federal Supply Schedule (FSS) contracts (issued under FAR part 8.4) are exempt from these small business programs, a contracting officer nonetheless has discretion to set-aside FSS orders for small businesses.

The late, great Yogi Berra once said that “Baseball is 90 percent mental. The other half is physical.” Sometimes it seems as if Yogi’s logic is equally applicable to the claims process in the world of Government contracting, where 90 percent of the early battle is following the correct claim initiation procedures prescribed by the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109.

The CDA is an indispensable statute that, inter alia, codifies a disputes process for companies wishing to assert claims based on Government acts and/or omissions in connection with a contract to which the CDA applies. Although the CDA is omnipresent in the world of Government contracting, an August 4, 2016, decision by the Armed Services Board of Contract Appeals (Board) highlights the danger faced by contractors who fail to comply with its most basic requirement – i.e., the written submission of a valid “claim” to the Contracting Officer in the first instance. The case is Arab Shah Constr. Co., ASBCA No. 60553, and the facts are straightforward:

In March 2011, Arab Shah Construction Company (“Arab Shah”) was awarded a contract for $62,000 to construct a metal pole barn in the village of Mangwal, Afghanistan.

On May 23, 2011, the Contracting Officer informed Arab Shah via e-mail that the pole barn was needed in Gardez, Afghanistan, instead of Mangwal, and that the contract would be modified to effect the change in location if Arab Shah could “keep the same price.” Later that day, Arab Shah agreed to the contract modification, but indicated that the change in location would cost “more money.” In response, the Contracting Officer purportedly pledged to pay Arab Shah’s relocation costs. Although the modification was executed just hours later, it did not provide Arab Shah with any additional funding.

On May 26, 2011, Arab Shah paid $19,000 to transport the materials to Gardez.

On September 22, 2011, the Government paid Arab Shah $62,224.09 – constituting the $62,000 contract amount plus $224.09 in interest.

Arab Shah filed an undated Notice of Appeal (Appeal) that was received by the Board on April 22, 2016. The Appeal stated that Arab Shah “never got the payment for the services” despite the fact that it delivered “all the equipment . . . to the site.”

The Government filed a Motion to Dismiss (Motion) the Appeal on May 17, 2016, for lack of jurisdiction. In so doing, the Government argued that Arab Shah “never submitted a claim in a sum certain” to the Contracting Officer.